Go to device manager... What GFX card appears there?

Only m17x R3 and above have that option.

Are you sure you have a R2 and not a M17x?

What sort of CPU do you have? An i7 or a intel core 2 duo or quad?

Sorry, just seen your specs, so you do have a R2. :P

well its almost 110% positive  its a R2  .. anyway another thing to check  is when was the last time the fans/ cooling was cleaned out for dust... if it hasent card can be overheating , also are you running on battery cause that will cause decresed performance aswell as battery cant fully power the  video card

Hi - The M17xR2 model did not come with on board (intergrated) graphics, it only has Blackcomb MXM style GPU's.

The M17xR2 was the only model (besides 3D) that did not come out with intergrated graphics, so the F7 (I/D GFX) button does not work at all on the M17xR2.

Maybe the lag is assosiated with you internet connection, have you tried WLAN (Hardline) instead of WiFi

Thank you for the post everyone, sorry I didn't see any of these suggestions. 

Yes, I do have the M17xR2. If it doesn't have integrated graphics, than what's the reason for it to have those buttons in the instructions? I thought reading the instruction booklet that came inside the box would help before posting this, which was the reason why I thought this was the problem. And I always have wired connection when it comes to connecting while playing games. And the plug is in, and not on battery. The last time I've open to clean the fans would have to be 2-3 months ago. I try not to open it too much.

The instructions were a generic copy of the previous model (M17x) It was easyier and cheaper for Dell to leave the I/D GFX key were it was instead of re-designing the keyboard - The only different between the M17x and M17xR2 was the motherboard - EVERY other part was interchangable.

Every 6 months is quite enough for fan cleaning unless your a gaming nut or live in a really dusty area or have pets in the house

Have you tried another game to see if the same problem happens?

Yes I have, and I get the same problem. Well that's just sad that instead of feeding there customers the right information, they rather save a few bucks. I guess The only thing I can do is get more ram or something.